Federal Reserve Holds Rates Steady for Second Consecutive Meeting, Powell Signals Hawkish Stance, Rate Cut Expectations Significantly Delayed

In the early morning hours of March 19 Beijing time, the Federal Reserve announced it would maintain interest rates unchanged, marking the second consecutive "hold" following the previous meeting. Federal Reserve Chair Powell released clearly hawkish signals during the subsequent press conference.

Powell stated bluntly that current U.S. inflation remains stubborn, and the outlook carries increased uncertainty. He specifically pointed out that certain oil shocks will gradually be reflected in core inflation data, and if inflation management fails to make substantial progress, the Federal Reserve will not cut rates. Additionally, he mentioned that several Federal Reserve officials have already shown a preference for reducing the number of rate cuts in the future.

Regarding his personal tenure, Powell stated that if a successor has not yet been confirmed by the time his term as Federal Reserve Chair ends, he will continue to serve as "acting chair" to fulfill his responsibilities.

Influenced by these hawkish remarks, market rate cut expectations have cooled significantly. According to the Fedwatch tool, the next rate cut may need to wait until the end of 2026.

Recently, futures market traders have predicted that by the end of this year, the Federal Reserve's rate cut magnitude will be only 25 basis points.

#Federal Reserve Rate Decision Announcement